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Danish income figures show signs of falling inequality

People on lower salaries saw the highest relative increase in their income in 2018.

Published: 13 November 2019 17:13 CET

Danish income figures show signs of falling inequality

File photo: Liselotte Sabroe/Ritzau Scanpix

For the first time since 2012, incomes at the bottom end of the pay scale have seen higher percentage growth than those at the top, new figures from Statistics Denmark show.

The threshold for wage earners to be in the bottom ten percent of incomes increased by 2.4 percent between 2017 and 2018.

That compares to the threshold for being among the richest ten percent increasing by 1.7 percent over the past year.

The development is partly due to a fall in the number of young people aged 18-25-years earning lower incomes, including the state student grant (statens uddannelsesstøtte, SU).

A general increase in employment may also be a relevant factor, according to Statistics Denmark.

Meanwhile, fewer people are receiving the lowest social security benefits including unemployment support (kontanthjælp), education benefits and integration benefit (integrationsydelse).

Furthermore, the number of people who are considered to be living in poverty has decreased by 3,500, to 254,000.

Poverty is defined for this purpose in relation to the general standard of living in Denmark, and therefore does not take into account the global situation.

According to Statistics Denmark's definition, if you meet two criteria:

To meet the Statistics Denmark criteria, a person or family’s income must be less than half of the overall median income (excluding pension).

In 2018, that equated to an annual disposable income of 123,572 kroner or less.

The second criterion is that a person’s total savings or fortune (excluding pension) – must be less than half the median income.

Families with a student as the main income provider and young people who have moved away from home during the preceding year do not count towards the statistic.

The trends in income over the past year mean that inequality in Denmark has fallen slightly.

Inequality in a society is statistically calculated by the Gini coefficient: Denmark’s has fallen from 29.1 to 29.3.

However, the country has still seen an overall rise in inequality in recent years. In 2010, the Gini coefficient was at 27.5, while in 1990 it was 22.2.

READ ALSO: The one percent: How Denmark's rich are getting much richer

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Norway ranked world’s top nation for 'human development'

Photo: tan4ikk/Depositphotos

The annual report takes into account factors including life expectancy at birth, expected years of schooling, mean total years of schooling, and gross national income per capita.

A product of these factors is used to calculate a country’s Human Development Index (HDI).

Norway’s overall score on the index was 0.954, moving it from number 5 on the 2018 index to number 1 in 2019.

The Nordic nation was also ranked first in 2017.

Switzerland, Ireland, Germany and Hong Kong (SAR) took the remaining top five places on the index. Nordic neighbours Sweden and Denmark were placed 8th and 11th respectively.

The report also finds that Norway’s HDI score has grown consistently in the long term, with a 0.41 percent increase in the index since 1990 and a 0.16 percent increase since 2010.

But the increase for the current decade was smaller as a function than that for the 2000s, when the HDI grew by 0.27 percent.

Norway was also found to have low inequality. The country retained its placed as the highest-ranked nation in the UN development index after each nation’s HDI score was adjusted for inequality.

“In Norway, Spain, France and Croatia… the bottom 40 percent (of earners) saw their incomes grow at a rate similar to that of the average income,” the report notes.

However, in Norway and France, “the top 1 percent of incomes grew more than the average, meaning that the income share of the groups in between was squeezed,” it added.

The country ranked top of the index for gender development, meanwhile, despite a notable difference in estimated gross national income per capita for men and women.

The HDI for Norway, classified by gender, was 0.946 for women and 0.955 for men.

“While Norway is pleased to top the list, the countries that are at the top must do more to help those at the bottom,” Minister of International Development Dag-Inge Ulstein told news agency NTB.

“For the first time in world history, we have a real opportunity to eradicate all extreme poverty in the world. But after a long period of progress, we now see that the arrows are pointing downwards for many of the poorest countries. Right now. we are not on track to achieve the sustainability goals by 2030. The clock is ticking,” the minister added.

Those views appear to be supported by the overall conclusions of the report, which state that “two children born in 2000 in countries with different levels of human development will have vastly different prospects for adult life”.

“The wave of demonstrations sweeping across countries is a clear sign that, for all our progress, something in our globalized society is not working,” United Nations Development Programme administrator Achim Steiner said via the UNDP website.

READ ALSO: How Norway's schools compare to other countries in global ranking

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